Nine emerging technologies will transform innovation management

30 January 2019Consultancy.uk

New research has revealed that digital technology could transform the innovation process across all types of organisations in the coming years. However, barriers such as a shortage of digital thinkers and capabilities threaten to hold back the majority of companies.

With the importance of innovation to the future of modern businesses becoming increasingly important, companies across all sectors are coming under pressure to realise the potential of technological changes, as they look to avoid falling prey to digitally disruptive competitors. A key indicator of this sea change in innovation is the booming digital transformation consulting market, which is now worth more than $44 billion, as clients tap firms for support of their overhauls.

However, despite vast commitments of resources towards retooling the digital technologies of top businesses, recent studies have shown that in most cases, digitalisation efforts fall short of achieving top-line growth. This is largely tied to the legacy IT infrastructure of many organisations, which can struggle to get the most from the latest digital advances, hampering transformation efforts.

This disconnect between desire and execution has been exposed in stark detail by a new study, which has revealed that 90% of business leadersbelieve that digital technology will transform their industry. At the same time, more than six in ten see legacy IT as standing in the way of realising the potential of digital technology, while an even higher portion cited a skills shortage as holding back this progress.

Barriers to reaching potential

According to the report from consulting firm Arthur D. Little,emerging technologies are expected to partly or even completely transform the way innovation gets done, according to 93% of all surveyed companies. However, some 50% of respondents said that they were still looking to understand the full potential of new technology on their businesses, suggesting that while many are aware of the importance of innovation, a large portion of businesses have not adequately examined how it applies to them.

Naturally, adopting all these technologies is not easy either. There are many barriers facing firms, with respondents most often citing a shortage of digital thinkers as the biggest challenge. 47% said that they were likely to be impacted by such talent demands, while a further 45% said that they would struggle thanks to their present capabilities. With legacy IT systems in place often being poorly suited to new digital platforms, this often presents a major hurdle to a transformation project.

Once firms have overcome these key obstacles, according to the researchers, there are nine technologies which will bring a distinct type of benefit to innovations at a company. These are big data/advanced analytics; connected things; additive manufacturing; virtual modeling/simulation; cognitive, self-learning systems/bots; augmented reality; collective intelligence/crowd sourcing; virtual workplace/workplace 4.0; and eLearning.

According to the authors, these nine categories can be grouped into three families, depending on what they bring to innovators. First are those which boost intelligence, e.g. about customer needs. In the second group are technologies that bring better and faster foresight, e.g. concerning product performance. Finally, there are digital solutions that improve and accelerate collaboration, communication and learning.

Digital’s benefits to innovation

According to the authors, the transition to digital innovation in these fields will bring many benefits. The share of sales from new offerings relating to digital technology could be in line to benefit to the tune of some 211%, according to Arthur D. Little’s estimates.

Innovation success rate is also likely to increase by some 194%, while the speed of such a process might improve by 177%. Leaders will benefit from a 1.7x increase in innovation performance, rising to 2.4x for those that are able to optimize their operations through digital.

Commenting on the findings, Michaël Kolk, Partner and Digital Innovation Lead, Arthur D. Little, explained, “All organisations understand that digital technology will transform innovation and deliver enormous benefits. However, our report shows that these benefits will be unevenly distributed, with many organisations struggling to overcome barriers that are holding them back. Now is the time for this group to begin their digital journey in order to successfully prepare for the future.”